Exhibit 10.21
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of the 12th day of November, 1996 between
Maxim Pharmaceuticals, Inc. ("Company") and Xxxxx X. Xxxxxxxxx ("Executive").
PRELIMINARY STATEMENT
WHEREAS, the Company wishes to retain the Executive as Chairman of the
Board of Directors, President and Chief Executive Officer of the Company, and
the Executive wishes to continue in such positions, all on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the Company and the Executive agree as follows:
1. TERM OF AGREEMENT. This Agreement shall commence on October 1, 1996
and shall continue in effect for a term ending on December 31, 1998 ("Term"),
except as hereinafter provided.
2. POSITION AND DUTIES. Except as may otherwise be agreed upon between
the Company and the Executive, the Company agrees to employ the Executive, and
the Executive agrees to serve the Company, as Chairman of the Board of
Directors, President and Chief Executive Officer. The Executive shall render
such services to the Company as are customary for such positions and perform all
other services incident thereto. At all times, the Executive shall report
directly to the Board of Directors of the Company. The Executive shall devote
substantially all of his working time and efforts to the business and affairs of
the Company, except for time spent for service on the boards of directors of
other corporations, vacations as defined by Company policy and civic and
charitable activities, and shall represent the Company within its industry.
3. PLACE OF PERFORMANCE. In connection with his employment by the
Company, the Executive shall, except as the Executive may otherwise agree,
perform his principal activities at the offices of the Company located in San
Diego, California, subject to travel reasonably required for the Company's
business.
4. COMPENSATION AND RELATED MATTERS.
4.1 BASE SALARY. During the Term, the Company shall pay to the
Executive, in approximately equal installments not less often than twice per
month, a base salary of not less than $225,000 per year through December 31,
1998 and such base salary shall be subject to increase from time to time based
upon recommendations from the Compensation Committee to the Board of Directors.
All amounts payable to the Executive pursuant to this Agreement shall be paid
subject to such reporting and withholding requirements, if any, as may be
imposed by applicable law and applicable Company policy.
4.2 INCENTIVE PLAN. The Executive shall be eligible to receive
bonus payments pursuant to a plan to be prepared by the Company's Board of
Directors with the Executive's participation ("Bonus Plan"). The parties shall
endeavor to establish the initial Bonus Plan at the earliest practicable time.
The Bonus Plan shall provide that, assuming reasonable satisfaction of the
performance criteria to be set forth in the Bonus Plan, the Executive shall be
eligible to earn an annual bonus with respect to each of the Company's fiscal
years during the Term in an amount up to 30% of the Executive's annualized base
salary hereunder, such bonus to be payable within ninety days after the end of
each such fiscal year. The bonus will be based upon the annualized base salary
for the year in which the bonus applies.
4.3 BENEFIT PLANS AND ARRANGEMENT. The Executive shall be entitled
to participate in and receive benefits under the Company's employee benefit
plans and arrangements in effect during the Term. The Company shall pay the
entire cost of the Executive's health, life and disability insurance coverage
under the Company's plans and policies during the Term, notwithstanding anything
to the contrary in such plans and policies.
4.4 PERQUISITES. During the Term, the Executive shall be entitled
to receive fringe benefits ordinarily and customarily provided by the Company to
its senior officers.
4.5 EXPENSES. The Company shall promptly reimburse the Executive
for all normal out-of-pocket expenses related to the Company's business actually
paid or incurred by him in the performance of his services under this Agreement.
4.6 STOCK OPTIONS. In addition to previously awarded options, the
Company's Board of Directors will award the Executive options to acquire 83,333
shares of Common Stock of the Company at $9.00, a price which is considered the
fair market value of such stock at the date of this Agreement.
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Options issued will be 25% vested as of September 30, 1997 and the balance will
vest at 25% on each September 30 thereafter.
5. TERMINATION. The Executive's employment hereunder may be terminated
under the following circumstances (without impairing the Executive's rights
under benefit plans and arrangements and the Company's policies and procedures):
5.1 TERMINATION UPON DEATH OR PERMANENT DISABILITY. The Term shall
automatically terminate in the event of the death or permanent disability of
Executive. For purposes of this Agreement, "permanent disability" shall mean
the inability to perform services hereunder for a period of six consecutive
months.
5.2 TERMINATION BY COMPANY FOR CAUSE. The Company shall have the
option to terminate the Term (a) for cause in the event the Executive engages in
grossly negligent conduct or willful misconduct in connection with the execution
of his duties hereunder which materially and adversely affects the Company,
after written notice by the Company to the Executive of the specific acts that
form the basis for the termination, and (b) for the Executive's material
nonperformance of his duties hereunder, provided the nonperformance continues
uncorrected for a period of thirty days after written notice thereof by the
Company to the Executive specifically identifying the manner in which the
Company believes the Executive has not performed his duties. For purposes of
this Section 5.2, no act, or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his act or omission was in the best
interests of the Company.
5.3 SEVERANCE AND LIFE INSURANCE. If the Company terminates
Executive's employment other than for cause pursuant to Section 5.2, Executive,
in lieu of all other remedies and as liquidated damages, shall be entitled to
receive a severance payment equal to his then annual base salary plus health
care insurance coverage for one year or the remainder of the term of this
Agreement, whichever is greater.
The Company shall also during the Term hereof maintain for Executive a term life
insurance policy in the amount of $1,000,000, with Executive's nominee as
beneficiary. Nothing herein shall derogate from the Executive's rights under
employee benefit plans, programs and arrangements or under applicable law.
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5.4 CONSTRUCTIVE DISCHARGE. Any significant reduction or adverse
change in the nature or scope of the Executive's authority, duties, status or
position contemplated by Section 2 hereof, including an involuntary relocation,
or a reduction the base salary and/or benefits of the Executive from those
provided for in Section 4 hereof as they may from time to time be in effect,
will be the basis for the Executive's termination of this Agreement by giving at
least 30 days prior notice to the Company and in such event the termination will
be treated as a termination by the Company without cause under Section 5.3.
5.5 BENEFITS UPON TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION BY
EXECUTIVE. In the event the Company properly terminates Executive's employment
under this Agreement for cause pursuant to Section 5.2 or Executive voluntary
resigns from his employment during the Term:
a. all salary shall be prorated as of the date of termination
and such prorated amount shall be paid to Executive;
b. all stock options or stock appreciation rights granted to
Executive shall be governed by the instruments granting such rights; and
c. the Company shall (i) make such other and further payment to
Executive, his designated beneficiaries and his dependents as may be provided
pursuant to the terms of any employee benefit plan and other compensation plans,
programs and structures, or fringe benefit programs in which Executive is a
participant at the time of the termination of his employment with the Company
and (ii) promptly reimburse the Executive for any then unreimbursed out-of-
pocket expenses pursuant to Section 4.6.
6. ATTORNEYS FEES. If litigation shall be instituted to enforce or
interpret any provision hereof the prevailing party will reimburse the other
part for his reasonable attorneys' fees and disbursements incurred in such
proceeding and will pay prejudgment interest at the legal rate then in effect on
any money judgment or award obtained in such proceeding.
7. NOTICE. For the purposes of this Agreement, notices, demands and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed as
follows:
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If to the Executive:
Xxxxx X. Xxxxxxxxx
00000 Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
If to the Company:
Maxim Pharmaceuticals, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Corporate Secretary
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change in address shall
be effective only upon receipt.
8. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provision or conditions
at the same or at any proper or subsequent time. No agreements or
representations, oral otherwise, expressed or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly or referred to in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of California relating to contracts to be performed entirely therein.
9. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
10. HEADINGS. The headings of the paragraphs herein are for convenience
only and shall have no significance in the interpretation of this Agreement.
11. BIND AND INURE. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their heirs, personal representatives and
successors, including any successor of the Company by reason of any dissolution,
merger, consolidation, sale of assets or other reorganization of the Company.
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12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its seal to be affixed hereunto by its officer thereunto duly authorized,
and Executive has signed this Agreement, as of the day and year first above
written.
MAXIM PHARMACEUTICALS, INC.
By: /s/ G. XXXXXX XXXXXXX
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/s/ XXXXX X. XXXXXXXXX
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Executive
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